By Brianne Heidbreder
Insight Kansas
Governor Kelly recently rolled out her proposed budget for the 2025 fiscal year. Her priorities include an array of strategic initiatives including cuts to property and sales taxes, expansion of Medicaid, and increased investments in education and Kansas water systems.
Kelly’s budget also includes a plan to provide pay raises to state workers, implementing a 5% pay raise and increasing the minimum wage to $15 per hour for state employees.
In announcing her balanced budget, Kelly emphasized that she is a fiscal conservative. However, she believes that raising state worker wages is critical if the public sector wants to compete for talent with private sector counterparts.
While Kelly wants to increase the minimum wage for state workers, there is no plan to raise it for all Kansas workers. Kansas will continue to follow the federal minimum wage standard of $7.25 per hour. This rate hasn’t changed in Kansas since 2010.
Kansas is not exactly an outlier as more than a dozen states do not exceed the federal standard. However, this is changing over time. As of January 1, more than half of the U.S. states have adopted a minimum wage higher than the federal minimum wage, including every state which borders Kansas except Oklahoma. This may put pressure on employers to raise wages in border cities, such as those in the Kansas City metro area.
Raising the minimum wage is not an easy political task. It has inspired extensive debates across the states.
Supporters, including the Fight for 15 movement that started in 2012, emphasize that raising the minimum wage is an important step in addressing income inequality. They note that wages have not kept up with the cost of living, nor have they kept up with worker productivity. They argue that a meaningful raise can improve the financial well-being of low-wage workers. Further, as wages improve, fewer people would rely on social welfare programs, saving taxpayer dollars.
Wage increases could also stimulate economic growth. Workers with higher incomes tend to spend more, contributing to local and state economies. Finally, advocates suggest that higher wages can enhance productivity and job satisfaction among employees. This benefits employers by reducing turnover and increasing employee loyalty.
On the other hand, critics express concerns about potential drawbacks. Small businesses may face challenges adjusting to the higher labor costs. Critics worry that if these businesses struggle to cover the additional costs, they may cut jobs or even close.
Additionally, opponents argue that a significant minimum wage hike could trigger inflation, affecting overall economic stability. This could occur if employers pass along the costs associated with these raises to consumers in the form of increased prices for goods and services. This could counteract some of the intended positive effects on workers’ real income.
Finding a balanced approach that addresses the needs of workers and the potential impact on businesses and broader economy is essential when considering such a policy shift. Kansas is sure to feel pressure to raise wages for all in the future.
Brianne Heidbreder, PhD is an Associate Professor of Political Science at Kansas State University.